Nestlé To Acquire Grupo CRM in Brazil

Food and drink conglomerate, Nestlé, will acquire the owner of Brazilian chocolate confectionery brands, Grupo CRM.

Nestlé, the multinational food and drink processing conglomerate from Switzerland announced an agreement to acquire a majority stake and control in Grupo CRM, a premium chocolate producer in Brazil, on September 7, 2023. Nestlé made the agreement with Advent International, a private equity firm that has had a majority stake in Grupo CRM since 2020. The deal is expected to be finalized in early 2024.

Transaction Summary

Our Take on the Acquisition

Nestlé (acquirer) acquired Grupo CRM (target) for its premium chocolates business in Brazil. Grupo CRM’s three brands are well-known and it has more than 1,000 locations in Brazil. Nestlé has an established distribution channel globally and could utilize the company to export their most popular items to North America and Europe. Nestlé has established partnerships with retailers in all the world’s major markets, and the premium chocolate Grupo CRM produces could easily be retailed in the confectionery section of supermarkets globally.

The Facts of the Acquisition

• Target: Founded in 1928, Grupo CRM is a boutique chocolate producer based in Brazil. It has been operating the Kopenhagen, Chocolates Brasil Cacau, and Kop Koffee brands and has more than 1,000 franchisee stores.
• Acquirer: Nestlé is a publicly listed Swiss multinational food and drinks processing conglomerate based in Vaud, Switzerland. It has been the world’s largest publicly held food company since 2014 and operates globally.

The Transaction

Date:	September 7, 2023
Price:	Undisclosed
Purpose:	To expand the Nestlé products portfolio in Brazil.
Acquirer’s Statement:	Laurent Freixe, CEO Zone Latin America at Nestlé – “This acquisition further broadens and strengthens our confectionery presence in Brazil, enabling us to enter the high-end segment. Kopenhagen and Brasil Cacau offer premium chocolates that are highly appreciated by Brazilian consumers. We are pleased that Renata Vichi [CEO of Grupo CRM] will continue to lead the company with her deep knowledge and passion for the chocolate business, people, and brands. Together, we will explore opportunities to further enhance the company’s unique premium chocolate experience.”

Target/Seller: Grupo CRM

Company Information

Target:	Grupo CRM
Website:	grupocrm.gupy.io
Founded:	1928
Industry:	Food Manufacturing – Confectionery
Type:	Private with Private Equity Funding
Employees:	2,630 (Self-published on LinkedIn)
Investors:	Advent International – A global private equity firm that invests in business and financial services, healthcare, industrial, retail and consumer, and technology sectors. The firm has invested USD $75 billion in over 410 private equity investments across 42 countries. The company is based in Massachusetts, United States. The investment was made in 2020.
Locations:	Head Office and Factory: Rodovia Fernão Dias, KM 938, Extrema, Minas Gerais, Brazil Regional Office: Rua João Lourenço, 560, Sao Paulo, Brazil Kopenhagen Office: 148 Av. Tancredo Neves, Salvador, Brazil

Product Information 

Products:	Baked Goods: Sandwiches, burgers, and croissants Beverages: Coffee, tea, juices, and others Chocolate Confectionery: Premium chocolate in a variety of flavors Non-Chocolate Confectionery: Cupcakes, cinnamon rolls, ice cream, and cookies
Brands:	Chocolates Brasil Cacau Kop Koffee Kopenhagen
Market Reach:	Brazil United States

Financial Information 

Estimated Revenue:

USD $972 million (i.e., USD $369,818 x 2,630 employee = USD $972 million – estimated based on the self-published number of employees and revenue per employee of the acquirer)

Did You Know?

Revenue in the chocolate confectionery market amounted to USD $238.5 billion in 2023. The market is expected to grow annually by a compound annual growth rate (CAGR) of 5.81% for the next five years, from 2023 to 2028. The five major chocolate manufacturers worldwide are Mondelez International, Mars, Nestlé, Ferrero, and Hershey.

Target/Seller Overview: Grupo CRM

Grupo CRM was created in 1928, and today the group consists of three leading brands: Kopenhagen, Chocolates Brasil Cacau, and Kop Koffee. It also has a state-of-the-art manufacturing plant in Extrema, Minas Gerais, in southeast Brazil. With more than 2,600 employees, CRM is one of the largest franchisors in the country, operating more than 1,000 chocolate boutiques under the Kopenhagen and Chocolates Brasil Cacau brands. It also has a growing online presence.

Buyer/Acquirer: Nestlé

Company Information

Buyer:	Nestlé
Website:	nestle.com
Founded:	1866
Industry:	Food and Beverage Manufacturer
Type:	Publicly Listed Company (Ticker: NESN on SIX Swiss Exchange)
Employees:	273,000 (Source: Company website)
Locations:	Head Office: Av. Nestlé 55, Vevey, Switzerland

Product Information 

Products:	Beverages: Coffee, milk drinks, and juices Cereals: Variety of breakfast cereals Chocolate, Confectionery, and Baked Goods: Multiple brands of chocolates, candies, cookies, and snacks Culinary, Chilled, and Frozen Food: Frozen pizza, meal kits, spreads, sauces, and desserts Healthcare Nutrition: Infant formula and baby meals Instant Foods: Dried or powdered food Petcare: Dry dog food, cat food, and dental chews Water: Mineral water under a variety of brands
Brands:	Over 2,000 brands including Kit Kat Maggi Milo Nesquik Nescafé Smarties
Market Reach:	Worldwide

Financial Information 

Market Cap:	USD $280 billion
Revenue:	USD $101.7 billion (Source: Pitchbook)
Revenue per Employee:	USD $369,818 (i.e., USD $101.7 billion / 275,000 = USD $369,818 – estimated based on the self reported number of employees and revenue from Pitchbook)
EBITDA:	USD $17.5 billion
P/E Ratio:	28.95
EV/EBITDA Ratio:	21.2

Buyer/Acquirer Overview: Nestlé

Nestlé is a publicly listed Swiss multinational food and drinks processing conglomerate based in Vaud, Switzerland. It has been the largest publicly held food company in the world since 2014. Nestlé’s products include baby food, medical food, bottled water, cereals, coffee, tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Nestlé has 29 brands with annual sales of over USD $1.1 billion, including Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi. Nestlé has 447 factories, operates globally, and employs around 273,000 people.

Previous Acquisitions by Nestlé (Partial List)

• Seattle’s Best Coffee (2022) – A specialty coffee retailer and wholesaler based in Washington, United States.
• Ankerkraut (2022) – A producer of high-quality spices and spice mixtures without flavor enhancers headquartered in Hamburg, Germany.
• Nuun Hydration (2021) – A producer and seller of sports drinks based in Washington, United States.
• The Bountiful Company (2021) – A global company that offers a wide range of brands and goods surrounding health and wealth based in New York, United States. The deal consideration was for USD $5.8 billion.
• Essentia (2021) – A premium bottled water company producing higher ionized alkaline water in Washington, United States.
• SimplyCook (2021) – Offers home recipe kits with easy step-by-step guides to cook restaurant-quality food in less than 20 minutes. The company is based in London, United Kingdom.
• Mindful Chef (2020) – Delivers all the fresh ingredients to create delicious, healthy meals. The company is headquartered in London, United Kingdom.
• Freshly (2020) – Produces gourmet ready-made meals, prepared and delivered at the door. The company is based in New York, United States. The deal consideration was for USD $950 million.
• Yinlu (2018) – A canned food and beverage company based in Fujian, China.

Sources

• Company Profile
  • Grupocrm.gupy.io
  • nestle.com
• Other Sources
  • https://pitchbook.com/profiles/company/11591-65#stock
  • https://www.crunchbase.com/organization/nestl

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